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In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Eli Lilly and Co (NYSE:LLY) in relation to its major competitors in the Pharmaceuticals industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.
Eli Lilly is a drug firm with a focus on neuroscience, cardiometabolic, cancer, and immunology. Lilly's key products include Verzenio for cancer; Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for diabetes; and Taltz and Olumiant for immunology.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Eli Lilly and Co | 130.09 | 65.53 | 22.21 | 19.02% | $3.12 | $7.09 | 25.98% |
| Johnson & Johnson | 21.61 | 5 | 4.27 | 4.69% | $5.68 | $14.87 | 2.34% |
| Merck & Co Inc | 143.74 | 8.12 | 5.36 | 12.22% | $6.96 | $12.23 | 8.89% |
| AstraZeneca PLC | 39.27 | 6.59 | 5.22 | 5.69% | $4.47 | $10.46 | 16.55% |
| Novartis AG | 24.10 | 5.45 | 4.61 | 6.23% | $4.66 | $9.02 | 9.71% |
| GSK PLC | 14.83 | 4.75 | 2.16 | 7.69% | $2.07 | $5.39 | 5.93% |
| Zoetis Inc | 33.01 | 15.46 | 9.04 | 11.91% | $0.93 | $1.55 | 9.5% |
| Takeda Pharmaceutical Co Ltd | 45.10 | 0.89 | 1.52 | -0.04% | $186.41 | $668.37 | -5.43% |
| Dr Reddy's Laboratories Ltd | 18.19 | 3.61 | 3.63 | 4.77% | $20.32 | $41.48 | 12.49% |
| Jazz Pharmaceuticals PLC | 23.33 | 1.92 | 2.03 | -0.39% | $0.23 | $0.81 | 1.03% |
| Corcept Therapeutics Inc | 30.01 | 5.99 | 6.64 | 5.22% | $0.03 | $0.14 | 38.95% |
| Prestige Consumer Healthcare Inc | 15.55 | 1.96 | 2.89 | 3.04% | $0.09 | $0.15 | -3.11% |
| Average | 37.16 | 5.43 | 4.31 | 5.55% | $21.08 | $69.5 | 8.8% |
By closely studying Eli Lilly and Co, we can observe the following trends:
Notably, the current Price to Earnings ratio for this stock, 130.09, is 3.5x above the industry norm, reflecting a higher valuation relative to the industry.
With a Price to Book ratio of 65.53, which is 12.07x the industry average, Eli Lilly and Co might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
The stock's relatively high Price to Sales ratio of 22.21, surpassing the industry average by 5.15x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 19.02% is 13.47% above the industry average, highlighting efficient use of equity to generate profits.
Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.12 Billion, which is 0.15x below the industry average, potentially indicating lower profitability or financial challenges.
The gross profit of $7.09 Billion is 0.1x below that of its industry, suggesting potential lower revenue after accounting for production costs.
The company is experiencing remarkable revenue growth, with a rate of 25.98%, outperforming the industry average of 8.8%.
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When comparing Eli Lilly and Co with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
Eli Lilly and Co has a relatively higher debt-to-equity ratio of 2.05 compared to its top 4 peers.
This could indicate a higher financial risk as the company is more reliant on borrowed funds, and investors may perceive it as a potential concern.
For Eli Lilly and Co in the Pharmaceuticals industry, the PE, PB, and PS ratios are all high compared to its peers, indicating potentially overvalued stock. On the other hand, the high ROE and revenue growth suggest strong profitability and future prospects. However, the low EBITDA and gross profit may raise concerns about operational efficiency and cost management. Overall, Eli Lilly and Co appears to be trading at a premium based on traditional valuation metrics, but its strong performance metrics could justify the premium in the long run.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: LLY
